Chinese Tron-based Ponzi Scheme Blows Up

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TRON was caught up in something out of Hollywood yesterday when police surrounded the company’s offices in Beijing. Twitter was soon awash with theories as to what was going down, with many stating incorrectly that the office had been raided, while many just enjoyed the spectacle. The move turned out to be protective measure undertaken by TRON CEO Justin Sun in an attempt to quell the angry crowds that had started to gather outside the office, apparently protesting that TRON was a scam. Confusion reigned for several hours before the truth emerged – the complaints were against a fraudulent scheme using TRON’s name that had just collapsed and lost investors their money.

TRON issued a statement once the situation had calmed, stating that after speaking to some of the protesters they realized that their anger related to a Ponzi scheme that used a very similar translation of the TRON name. TRON is known a ‘Wave Field’ in China, while the illegal group operated under the name ‘Wave Field Super Community’. According to some reports, community members asked Sun directly to clarify the relationship between his project and the group, amazingly taking his lack of a response to mean that they were related. The statement added that TRON did warn users through their social media channels of the potential scam when it first emerged, but clearly not enough people got the memo.

The TRX token price dropped some 6% on the news, from which it has recovered slightly, showing that the news didn’t really have much of an impact. Whatever you think of TRON and Sun, it’s clear that they neither it nor he is not responsible for what other people invest in, and the watchwords ‘do your own research’ continue to ring true. The events also show how reactive the crypto community can be, with every piece of semi-drama exacerbated by social media, illustrating just how far we have to go to mature as an asset class.